The Nashville Music Economy

When you think of the Nashville music industry, you might conjure up iconic country images such as Hank Williams's classic twang of "I'm so Lonesome I Could Die" and "Your Cheatin' Heart," or the country comedian Minnie Pearl, whose famous "How-DEE! I'm just so proud to be here!" greeted many Grand Ole Opry visitors.

And while Nashville is deeply rooted in and is best known for country music and still has a strong country music focus, the city and surrounding area have proven to be fertile ground for other genres and a variety of music-related careers. According to a study from the Nashville Area Chamber of Commerce, Nashville is connected to more genres of music than any other city in the world, which certainly contributes to its identity as Music City, USA. In fact, television network CMT recently released a documentary about the various genres and artists in Nashville.

Music as an economic engine
The music industry is certainly a large part of the Nashville area's economy. In fact, the Nashville Area Chamber of Commerce study, which was conducted for the Music City Council, estimates that the music industry contributes $5.5 billion to the local economy, and a whopping $9.7 billion within the Nashville metropolitan statistical area. It also adds more than $3.2 billion of labor income annually.

Nashville is home to a music entertainment cluster that is heavily grounded in the music creation and production sectors—but this cluster also includes sectors involved with distribution, touring, performance, management, talent, publishing, policy, regulation, and more. It is strongly linked to various other sectors of the economy, including banking, accounting, legal services, and construction.

The study also reports that Nashville has the highest concentration of music business establishments (music publishers, recording studios, record labels, distributors, and more) of any major metropolitan area in the United States. Additionally, 38.5 percent of all U.S. music establishments and nearly 40 percent of the entire music industry are concentrated in three U.S. cities: Los Angeles, New York, and Nashville.

Music festivals: Music tourism and the economy
Tourism is a large part of the Nashville economy. Visitors spend more than $4 billion annually. Jennifer Fowler, associate professor of economics and music business at Belmont University, said, "Music-related tourism has always been a staple in the Nashville economy. However, I have seen tourism grow as the popularity of Nashville as a city-destination has grown." She also indicated that Nashville music- and entertainment-related tourism has experienced strong growth since 2009.

Many tourists come for the music festivals, which are an important component of the music industry, according to the Nashville study. Early June in middle Tennessee is prime time for two major music festivals that have national and international reach: the CMA Music Festival and the Bonnaroo Music and Arts Festival.

"The CMA Music Festival draws country music fans from across the globe, with 24 different countries represented at the 2014 event. One of the biggest impacts of this event is the fact that many of the fans return annually," Fowler said.

While these two music festivals are very different, they both provide significant economic benefits for the local economy and highlight the diversity of the music scene in the Nashville area.

The table below provides an overview of the two music festivals.


CMA Music Festival

Bonnaroo Music and Arts Festival


Nashville, TN

Manchester, TN
(60 miles southeast of Nashville)

First year



Primary music genre


Eclectic rock

Number of attendees



Length of event

4 days

4 days

Direct economic impact

$31.5 million

$36 million

Sources: "CMA Music Festival Direct Visitor Spending Reaches New High," "Study: Bonnaroo has $51M Economic Impact," "MTSU College of Mass Communication teams with Bonnaroo"

Preparing the future music industry workforce
The human, social, and cultural capitals are cornerstones of the music industry and are certainly driven by the entrepreneurial spirit, innovation, and collaboration. Industry immersion is often one of the best ways to learn about the industry and its related careers. Partnerships between education and the music industry in Nashville often make this possible.

Nashville's Belmont University has the Mike Curb College of Entertainment and Music Business, which is named for a music industry executive. The college's industry connections offer students the opportunity to learn more about the inner workings of the music industry directly from key industry decision makers and artists as well as to participate in internships within the music entertainment industry.

Students at Middle Tennessee State University have worked behind the scenes at the Bonnaroo music festival to understand from the inside out the dynamics of a large-scale entertainment event.

Industry-related learning opportunities are found also in secondary schools. High school students in Metro Nashville Public Schools are learning directly from music industry professionals through the Academies of Nashville. In this smaller learning community, with instruction that is project-based, applied, and integrated, students are learning in the context of a career or academic theme.

Students at Pearl-Cohn Entertainment Magnet High School focus their learning around the nation's only student-run record label affiliated with a major label, Warner Music Nashville. The Pearl-Cohn programs focus on careers in audio engineering, broadcasting, production, marketing communications, songwriting, publishing, and technology.

At another music industry-related academy, the CMT Academy of Digital Design and Communication at McGavock High School, students focus on the communication, broadcasting, and technology side of music entertainment. Lucia Folk, vice president of public affairs at CMT, said, "There is no better way to contribute to the success of a community than through supporting quality education for every child." Folk noted that when Metropolitan Nashville Public Schools redesigned its zoned high schools into smaller learning communities, CMT immediately saw the connection between this new initiative and their parent company's (Viacom) ongoing mission of incorporating social responsibility into its business practices and using its resources to build better communities.

"We partnered with McGavock High School's Academy of Digital Design & Communication, and over the past three years, this relationship has been transformational, not only for the school, but also for our employees" said Folk. She added, "CMT's partnership with McGavock High School and the Academies of Nashville has been some of the most impactful work I've had the opportunity to do in my life. I've said many times that the real magic of the Academies structure is that it is community-building at its core. McGavock is our school and we share the challenges and successes with our teachers, administrators, fellow business partners, and most importantly, our students."

Teaching about economics using the music industry
This issue of Extra Credit focuses on a number of ways to integrate arts and humanities, including the music industry, into the classroom. Additionally, the Federal Reserve Bank of Boston's Show Business: The Economic$ of Entertainment  is an online learning tool about economics and the entertainment industry. Unit 1: Climbing the Charts   focuses on how the market for music developed, and Unit 2: Another Action Hero   teaches about the film industry and about the economics of international trade and globalization.

Entrepreneurs   is a booklet that is part of the Dallas Fed's Everyday Economics  series that introduces the critical role entrepreneurs play in the economy. Two accompanying lessons, the "Great American Entrepreneur"  and "What Is an Entrepreneur?" , and related lesson components can be found on the tab labeled Interactive Whiteboard Lessons .

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By Jackie Morgan, senior economic and financial education specialist, Nashville Branch
February 4, 2015